On May 10, 2014, The Architectural League of New York and the Columbia University Graduate School of Architecture, Planning and Preservation (GSAPP) convened a series of discussions at The TimesCenter on the connection points between energy, architecture, climate change, and our economic future. Under the joint banner of the respective initiatives — The Five Thousand Pound Life: The Energy Issue — the League and GSAPP hosted energy experts and entrepreneurs across many disciplines. Yesterday, the League released two videos from the symposium (embedded below): a keynote address by Jeremy Leggett, and a conversation between Rosalie Genevro and Kate Gordon.
Kate Gordon is the executive director of Risky Business. This project couples an independent financial risk assessment of climate change impacts in the United States with an engagement effort to create awareness about how to mitigate this risk at the national and regional levels. In other words, Risky Business seeks to identify the economic sectors most at risk from climate change and to help them prepare appropriate responses. This joint partnership of Bloomberg Philanthropies, the Paulson Institute, and TomKat Charitable Trust is co-chaired by Michael Bloomberg, Hank Paulson, and Tom Steyer — public figures from across the political spectrum who underpin the project with considerable authority in the world of business and finance. Under Gordon’s direction, Risky Business this morning launched a new report on the economic risks of climate change in the United States with a press conference, video of which is available on their website. Copies of the report can also be accessed by signing up for updates via their website.
The buzz for their new report is building quickly, with co-chair Hank Paulson’s call for a carbon tax — traditionally anathema to conservatives — in The New York Times. While welcoming this sentiment, Paul Krugman has already challenged its practicality, offering “second-best” alternatives such as fuel efficiency standards and government subsidies and loan guarantees to support clean energy. Krugman arms us with such actions under the premise that a carbon tax is a political non-starter given the current composition of Congress.
Recognition of the economic risk due to climate change is relatively recent in the context of American financial markets, whereas The Carbon Tracker Initiative in the United Kingdom identified this blind spot in the market as early as 2012. The Initiative’s Chairman, Jeremy Leggett, delivered the keynote address on “Systemic Risk in Energy Markets and the Shift to New Narrative.” In his speech, Leggett adeptly characterizes the “carbon bubble” — rapidly becoming common parlance for the hidden economic risk due to the overvaluation of fossil fuel companies. Despite incorporating massive reserves of carbon-based fuel into their market values, these companies cannot liquidate these assets if policy responds to climate science. In our current predicament, either fossil fuel companies crash, or the planet overheats. Leggett begins to illustrate how their business model is no longer viable. It is this link between environment and economy that allows a new platform for an old discussion that becomes more urgent with time — a discussion that Risky Business is positioned to lead in the coming years.
Jeremy Leggett’s Systemic Risk in Energy Markets and the Shift to a New Narrative from Architectural League of New York on Vimeo.
The views expressed here are those of the authors only and do not reflect the position of The Architectural League of New York.